Aug. 26 (UPI) — President Donald Trump threatened to raise tariffs and restrict U.S. chip exports on countries that have a digital services tax.
He wrote on Truth Social Monday that digital service taxes, largely implemented by Britain and the European Union, “are all designed to harm, or discriminate against, American Technology.”
“I put all Countries with Digital Taxes, Legislation, Rules, or Regulations, on notice that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A.,” Trump wrote.
He added that the United States would also “institute Export restrictions on our Highly Protected Technology and Chips.”
“Show respect to America and our amazing Tech Companies or, consider the consequences!” he wrote.
The taxes are meant to apply only to the largest tech companies like Alphabet, Meta and Amazon, which are based in the United States. The countries that have digital services taxes argue that tech titans like Amazon operate within their borders and generate huge profits from their people while paying little or no taxes to those governments.
The U.K.’s digital services tax raises about $1.1 billion annually from global tech companies through a 2% tax on revenues. Trump said these taxes “outrageously give a complete pass to China’s largest tech companies.”
France, Italy and Spain also have DSTs.
Trump declared in June that he would cut off all trade talks with Canada over the tax, which it had recently passed. When Canada quickly removed its tax just before it was set to turn on, the White House boasted that Canada had “caved” to pressure.
In February, Trump signed an executive order titled Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties, threatening tariffs.
In April, it emerged that Keir Starmer offered big U.S. tech companies a reduction in the headline rate of the DST to appease Trump, at the same time applying the tax to companies from other countries.